Milk price changes could be coming

Dairy farmers, cheese makers push for accord

Dairy farmers and cheese makers, who have long tussled over state-regulated milk prices, may be close to an agreement on a short-term price increase to help producers offset staggeringly high feed prices.

Dairy farmers and cheese makers, who have long tussled over state-regulated milk prices, may be close to an agreement on a short-term price increase to help producers offset staggeringly high feed prices.

And in seeking a longer-term solution, the state Senate Agriculture Committee approved legislation Thursday that would fund an industry task force and give it a July 1 deadline to recommend reforms to California's antiquated and byzantine milk pricing system.

Milk pricing could affect as much as one-third of San Joaquin County's $2 billion-a-year agriculture industry.

Gary Conover, government relations director for Western United Dairymen, a farmer interest group, said an agreement has been reached that would raise the price on milk used for cheese.

"The cheese processing industry understands the dire situation the producers are in and has agreed to help them out to the tune of $110 million over a 12-month period," he said Friday.

Close, but not quite, said Rachel Kaldor, executive director of the Dairy Institute of California, representing milk processors.

Cheese makers would agree to support the higher price but would ask the state secretary of agriculture to impose the change if it is warranted by economic conditions.

"If we can't agree that the secretary has that authority and that economic fact has to be the basis on which these decisions are made, than I'd say we still have some distance between us," she said Friday.

Conover said much progress had been made on finding some short-term price relief for dairy farmers but admitted some issues remain.

"The next step would be, how do we engage the (California Department of Food and Agriculture) in that activity," he said.

What was accomplished Thursday by the Senate Agriculture Committee, which is chaired by Sen. Cathleen Galgiani, D-Stockton, was the amendment and approval of a bill giving statutory authority to the California Dairy Future Task Force, a panel originally created by the agriculture secretary; providing it funding; and requiring it recommend changes in the state's milk pricing system by July 1.

Such reforms are sorely needed, Conover said.

California's dairy industry has suffered more than $2 billion in losses in the past five years, pushing nearly 400 of the state's dairies out of business, and the remaining 1,500 dairies are fighting for survival, he said.

"We've got a need to structure things to better reflect market conditions, for finished products ... as well as the cost of production."